MBA (Full-Time) I year

Semester I Examination 2021

Paper No: MBFT- 6102 Data Analysis & Decision Tools

Time: 3 hours Max. Marks: 70

INSTRUCTIONS: The question paper contains seven questions in six pages. Attempt any Five
questions selecting at-least TWO questions from each section All questions carry equal marks.

Section A

1(a) The daily trading volumes (millions of shares) for stocks traded at the New York
Stock Exchange for 12 days in October 2007 are shown here.

917 983 1046 944 723 783

813 1057 766 836 992 973

The probability distribution of trading volume is approximately normal.

What is the probability that on a particular day the trading volume will be less than
800 million shares? If the exchange wants to issue a press release on the top 5%
of trading days, what volume will trigger a release? ( 7)

(b) Citibank reviews its credit card policy with the intention of recalling some of its
credit cards. The data shows that approximately 5% of cardholders defaulted in the
past, leaving the bank unable to collect outstanding balances. The bank also found
that the probability of missing a monthly payment is 0.2 for customers who do not
default. Of course, the probability of missing a payment for those who default is 1.

(i) What is the probability that the customer will default if he missed a monthly
payment?
(ii) The bank would like to recall its card if the probability that a customer will
default is greater than 0.20. Should the bank recall its card if the customer
misses a monthly payment? Why or not Why? ( 7)
2(a) Conduct a statistical test to determine is a significant difference between the Mean
and variances in the bag weights for the two machines. Use a 10% level of
significance when weights are normally distributed. What is your conclusion?
Which machine, if either, provides the greater opportunity for quality
improvements?
No of Observations Mean Standard Deviation

Machine 1 25 5.9 2

Machine 2 22 6.3 1.9

(7)
(b) In a study of brand loyalty in the automotive industry, new-car customers were
asked whether the make of their new car was the same as the make of their previous
car. The breakdown of 600 responses shows the brand loyalty for domestic,
European and American cars.

Domestic European American

Purchaser

Same make: 125 55 68

Different make: 140 105 107

Test a hypothesis to determine. Whether brand loyalty is independent of the

manufacturer. Use level of significance 5%. What is your conclusion? If a significant
difference is found, which manufacturer appears to have the greatest brand loyalty?
(7)

3. Use a suitable test to determine whether there is a difference in the average income of
families who make purchases from Wal-Mart retail stores and families who do not make
purchases from Wal-Mart retail stores, at a 5% level of significance.

Annual income of families Annual income of

making purchases from families who do not
Wal-Mart (in dollars) make purchases from
Wal-Mart (in dollars)
$24500 $41000
39400 32500
36800 33000
43000 21000
57960 40500
32000 32400
61000 16000
34000 21500
 43500 39500
55000 27600
39000 43500
62500 51900
61400 27800
53000 ----

(7)

(b) Use a suitable test on the Vaccine testing data given below to determine whether there
is a difference in the antibias produced (in thousands) against the Covid-19 Virus by the
four vaccinees in the trials done on the four age groups, at a 5% level of significance.

Vaccine AGE
20-40 Years 40-60 Years 60-80 Years 80 Years and above
CoVaxine 46.00 40.10 46.00 46.70
Covishield 47.70 50.90 49.30 49.40
Sputinik 40.80 36.70 32.70 34.70
mRNA(phizer) 71.30 72.00 68.50 71.50

(7)

Section B

4. The manager of an inspection department has been asked to help reduce a backlog of
safety devices that must be inspected. There are two types of safety devices: one for
construction workers and one for window washers. The manager will be permitted to
select any combination of items because new testing equipment will soon be available
that will handle the remaining items. However, in the short run, the manager has been
asked to help generate revenue. The revenue for each construction device is $60 and
the same for each window-washing device is $40. The manager has obtained data on
the necessary inspection operations, which are as follows:

Time per unit (minutes) Total time available (minutes)

Operation Construction Window-washing
Test #1 ¾ 1/3 75
Test #2 ¼ ½ 50
Test #3 ½ ¼ 40
 (i) Formulate the above as a linear programming problem.
(ii) Determine the optimal values of the decision variables and the revenue that will
result.
(iii) Which testing operations will have slack time? How much?
(iv) Is any constraint redundant? Which one? Why?
(14)
5. (a) An investment company currently has $1 million available for investment in five
different stocks. The company wants to maximize the interest earned over the next year.
The five investment possibilities along with the expected interest earned are shown
below. To manage risk, the investment firm wishes to have at least 35% of the
investment in stocks A and B. Furthermore, no more than 15% of the investment may be
in stock E.

Investment Expected Interest Earned (%)

Stock A 7
Stock B 9
Stock C 8
Stock D 10
Stock E 11

Answer the following questions:

(i) What is the optimal total expected interest earned for next year?
(ii) Which constraints are binding? Which constraints are not binding?
(iii)What would be the impact on the optimal allocation if the expected interest earned on
stock A decreases to 6%?
(iv) What would be the impact on the optimal allocation if the expected interest earned on
stock A increases to 10%?
(v) What would be the impact on the optimal allocation and the objective function value if
 the expected interest earned on stock B decreases by 1%?
(vi) Suppose that total investment in stocks A and B must be at least 40% of the total amount
available for investment (i.e., $400,000). What impact would this have on the current
optimal objective function value?
(vii) Is the solution to the problem unique or are there alternate optimal solutions?
(viii) Is the solution to the problem unique or are there alternate optimal solutions?

(b) What do you understand by reduced cost?

(12+2=14)

6. (a) An airline with operations in San Diego, California must staff its ticket counters
inside the airport. Ticket attendants work 6-hour shifts at the counter. There are two types
of agents: those who speak English as a first language and those who are fully bilingual
(English and Spanish). The requirements for the number of agents depend on the number
of people expected to pass through the airline’s ticket counters during various hours. The
airline believes that the need for agents between the hours of 6 am and 9 pm are as
follows:

6 to 9 am 9 to 12 noon 12 noon to 3 pm 3 to 6 pm 6 to 9 pm

Agents needed 12 20 16 24 12`

Agents begin work either at 6 am, 9 am, 12 noon or 3 pm. The shifts are designated as
shifts A, B, C and D respectively. It is the policy of the airline that at least half of the
agents needed in any time period will speak English as their first language. Further, at
least one-quarter of the agents needed at any time should be fully bilingual. How many
and what type of agents should be hired for each shift to meet the language and staffing
requirements for the airline so that the total number of agents is minimized? Formulate
the above problem as a linear programming problem. You are not required to find out the
solution to the above problem.
(b) The owner of a new cab company wants to determine locations for cab waiting
points. He has gathered the following information:

Location Can serve areas Cost per day

1 A,E $400
2 A,C,D 500
3 B,C,E 450
4 B,D 440
5 D,E 430

The owner wants to be sure that all areas can be served, yet he wants this done for as little
cost as possible. Formulate the above problem.
(8+6 = 14)
 7. (a) An investment corporation has identified four small apartment buildings in which it
would like to invest. The three banks generally used by the investment corporation have
provided the quotes on the interest rates they would charge to finance each purchase. The
banks have also advised the Corporation of the maximum amount of money they are
willing to lend at this time. The Corporation would like to purchase as many buildings as
possible while paying the lowest possible amount in total interest. More than one bank
can be used to finance the same property. What should the Corporation do? You may use
excel solver to find out the solution.

Property (Interest rates)

Banks Hill Street Banks Street Park Avenue Drury Lane Max credit
First Homestead 8% 8% 10% 11% $80,000

Commonwealth 9% 9% 12% 10% $100,000

Washington 9% 11% 10% 9% $120,000

Federal

Loan required $60,000 $40,000 $130,000 $70,000

(b) A trauma centre keeps ambulances at locations throughout the east side of a city in an attempt
to minimize the response time in the event of an emergency. The times, in minutes, from the
ambulance locations to the population centres are given in the following table.
Population centres
Ambulance locations East North-East South-East Central
Site 1 12 8 9 13
Site 2 10 9 11 10
Site 3 11 12 14 11
Site 4 13 11 12 9
Find the optimal assignment of ambulances to population centres that will minimize the total
emergency response time. Use Hungarian method of assignment to find out the optimal
assignment.
(7+7 = 14)